Prudential Financial, Inc. Announces 2012 Results

After-tax adjusted operating income for the Financial Services
Businesses for year 2012 of $2.958 billion, or $6.27 per Common
share, compared to $5.83 per Common share for 2011.

•

Fourth quarter 2012 after-tax adjusted operating income for the
Financial Services Businesses of $798 million, or $1.69 per Common
share, compared to $1.78 per Common share in the year-ago quarter.

•

Significant items included in current quarter adjusted
operating income:

--

Pre-tax net benefit of $48 million in Individual Annuities,
including release of reserves for guaranteed death and income
benefits and reduced amortization of deferred policy acquisition
and other costs reflecting market performance, and charge for
impairment of capitalized software costs.

--

Pre-tax benefit of $78 million in Retirement from recovery, under
a settlement, of previously recorded losses attributed to certain
client investment funds managed by a third party.

--

Pre-tax net benefit of $32 million in Asset Management, including
gain from sale of a real estate related investment and charge for
impairment of capitalized software costs.

--

Pre-tax charge of $15 million in Individual Life for costs
incurred related to the Company’s acquisition of The Hartford’s
individual life insurance business which was completed in January
2013.

--

Pre-tax charge of $20 million in Group Insurance to increase legal
reserves.

--

Pre-tax charge of $10 million in International Insurance’s
Gibraltar Life operation for integration costs relating to the
acquisition of AIG Star Life Insurance Co., Ltd. and AIG Edison
Life Insurance Company.

--

Pre-tax charges totaling $69 million in Corporate and Other
operations, including increase in recorded employee benefits
liabilities reflecting completion of a review and writeoff of
issuance costs on debt securities redeemed prior to maturity.

•

Several of our U.S. businesses incurred costs in the current
quarter, as discussed below, for items such as business process
improvements, fund start-up costs, and reserves for costs
associated with certain client contracts, which we estimate are in
excess of a baseline level relative to current business volume,
with an estimated negative impact of approximately $100 million on
pre-tax adjusted operating income.

•

An update of the effective tax rate applicable to adjusted
operating income based on full year results contributed
approximately 7 cents per Common share to current quarter results.

•

Net income of Financial Services Businesses attributable to
Prudential Financial, Inc. for year 2012 of $428 million, or 94
cents per Common share, compared to $6.99 per Common share for
2011.

The current quarter net loss reflects pre-tax charges of
approximately $1.5 billion from net changes in value relating to
foreign currency exchange rates primarily resulting from changes
in value of the Japanese yen in relation to other currencies.
These currency-driven value changes were largely offset by
corresponding adjustments to accumulated other comprehensive
income which are not reflected in net income or loss.

•

Other financial highlights:

--

GAAP book value for Financial Services Businesses, $37.1 billion
or $79.19 per Common share at December 31, 2012, compared to $32.8
billion or $69.07 per Common share at December 31, 2011. Book
value per Common share excluding total accumulated other
comprehensive income, $57.86 at December 31, 2012 compared to
$58.39 at December 31, 2011.

--

Net unrealized gains on general account fixed maturity investments
of the Financial Services Businesses of $18.6 billion at December
31, 2012 compared to $10.5 billion at December 31, 2011; gross
unrealized losses of $2.1 billion at December 31, 2012, compared
to $4.3 billion at December 31, 2011.

--

During 2012, the Company acquired 11.5 million shares of its
Common Stock at a total cost of $650 million, for an average price
of $56.43 per share. These repurchases included 2.7 million Common
shares acquired at a total cost of $150 million in the third
quarter under an authorization in June 2012 by Prudential’s Board
of Directors to repurchase at management’s discretion up to $1.0
billion of the Company’s outstanding Common Stock through June
2013, with the remainder acquired under an earlier authorization.
From the commencement of share repurchases in July 2011 through
December 31, 2012, the Company has acquired 31.3 million shares of
its Common Stock under its share repurchase authorizations at a
total cost of $1.65 billion, for an average price of $52.72 per
share.

Prudential Financial, Inc. (NYSE: PRU) today reported after-tax adjusted
operating income for its Financial Services Businesses of $2.958 billion
($6.27 per Common share) for the year ended December 31, 2012, compared
to $2.845 billion ($5.83 per Common share) for 2011. Net income for the
Financial Services Businesses attributable to Prudential Financial, Inc.
was $428 million (94 cents per Common share) for 2012, compared to
$3.420 billion ($6.99 per Common share) for 2011. Information regarding
adjusted operating income, a non-GAAP measure, is provided below.

For the fourth quarter of 2012, after-tax adjusted operating income for
the Financial Services Businesses amounted to $798 million ($1.69 per
Common share) compared to $855 million ($1.78 per Common share) for the
fourth quarter of 2011. The net loss for the Financial Services
Businesses attributed to Prudential Financial, Inc. for the fourth
quarter of 2012 amounted to $214 million (48 cents per Common share)
compared to net income of $522 million ($1.08 per Common share) for the
fourth quarter of 2011.

The Company acquired AIG Star Life Insurance Co., Ltd. and AIG Edison
Life Insurance Company on February 1, 2011. Results of the Financial
Services Businesses include the results of these businesses from the
date of acquisition.

Reported results for the fourth quarter of 2012 and earlier periods
presented reflect the implementation of a discretionary change in
accounting principle related to the Company’s pension plans, as
discussed under “Change in Accounting Principle” later in this release.

Results of the majority of the Company’s international investments
operations, formerly included in the International Insurance segment,
have been reclassified and included in the Asset Management segment for
all periods presented herein. This reflects the Company’s decision to
align the management of these businesses.

“We are pleased with the progress we’ve made over the past year toward
achievement of our longer term objectives. We are continuing to benefit
from strong business momentum, with a growing base of quality business
driven by solid sales and flows. We surpassed significant milestones
during the year, including $1 trillion of assets under management, over
$400 billion of account values in our Retirement and Annuities
businesses, and annualized new business premiums of over $4 billion in
International Insurance. We’ve strengthened our U.S. businesses with the
completion of two major ground breaking pension risk transfer
transactions in the fourth quarter, building a leadership position in an
attractive market well suited to our proficiencies. These transactions
speak to our capabilities, our culture of multi-discipline
collaboration, and our financial strength. Our acquisition of The
Hartford’s individual life insurance business, which was completed early
this year, is also expected to provide financial and strategic benefits.
Our International Insurance business continues to perform well, with
results benefiting from growth in multiple distribution channels and our
achievement of cost synergies consistent with our goals through the
successful integration of the acquired Star and Edison businesses. Our
unique business mix, the quality of the businesses that make up that
mix, and the talent of our people support our prospects for achievement
of strong returns consistent with our targets as well as continued
growth,” said Chairman and Chief Executive Officer John Strangfeld.

Adjusted operating income is not calculated under generally accepted
accounting principles (GAAP). Information regarding adjusted operating
income, a non-GAAP measure, is discussed later in this press release
under “Forward-Looking Statements and Non-GAAP Measures,” and a
reconciliation of adjusted operating income to the most comparable GAAP
measure is provided in the tables that accompany this release.

Financial Services Businesses

Prudential Financial’s Common Stock (NYSE:PRU) reflects the performance
of its Financial Services Businesses, which consist of its U.S.
Retirement Solutions and Investment Management, U.S. Individual Life and
Group Insurance, and International Insurance divisions and its Corporate
and Other operations.

In the following business-level discussion, adjusted operating income
refers to pre-tax results.

The U.S. Retirement Solutions and Investment Management division
reported adjusted operating income of $668 million for the fourth
quarter of 2012, compared to $769 million in the year-ago quarter.

The Individual Annuities segment reported adjusted operating income of
$304 million in the current quarter, compared to $373 million in the
year-ago quarter. Current quarter results benefited $57 million from net
reductions in reserves for guaranteed minimum death and income benefits
and a net reduction in amortization of deferred policy acquisition and
other costs, reflecting an updated estimate of profitability for this
business. Results for the year-ago quarter included a net benefit of
$176 million from adjustment of these items to reflect an update of
estimated profitability. These benefits to results in both the current
quarter and the year-ago quarter were largely driven by market
performance relative to our assumptions during the respective periods.
In addition, current quarter results include a $9 million charge for
impairment of certain capitalized software costs based on a review of
recoverability. Excluding the effect of the foregoing items, adjusted
operating income for the Individual Annuities segment increased $59
million from the year-ago quarter. The increase reflected higher
asset-based fees due to growth in variable annuity account values, net
of related amortization of deferred policy acquisition and other costs
and distribution expenses. The net benefit from asset-based fees was
partly offset by higher expenses, including approximately $17 million of
current quarter costs for items including business process improvements
that we estimate are in excess of a baseline level relative to current
business volume.

The Retirement segment reported adjusted operating income of $225
million for the current quarter, compared to $140 million in the
year-ago quarter. Current quarter results include income of $78 million
from a recovery, under a settlement, of prior losses attributed to
certain client investment funds managed by a third party. Excluding this
item, adjusted operating income of the Retirement segment increased $7
million from the year-ago quarter. This increase reflected a greater net
contribution of approximately $40 million from investment results of the
segment’s institutional investment products activities, driven largely
by the initial results from two significant pension risk transfer
transactions consummated during the current quarter, as well as higher
fees associated with growth in account values. These increases were
partly offset by a lower net contribution from investment results of the
segment’s full service activities and higher expenses, including
approximately $16 million of current quarter costs for items including
business process improvements that we estimate are in excess of a
baseline level relative to current business volume.

The Asset Management segment reported adjusted operating income of $139
million for the current quarter, compared to $256 million in the
year-ago quarter. Current quarter results include a $9 million charge
for impairment of certain capitalized software costs based on a review
of recoverability, while results for the year-ago quarter include a
benefit of $96 million from the sale of the Company’s stake in Afore
XXI, a private pension fund manager in Mexico. The current quarter
contribution to results from the segment’s incentive, transaction,
strategic investing and commercial mortgage activities was $13 million
greater than in the year-ago quarter, as income of $41 million from the
sale of a real estate related investment for which we had previously
recognized an impairment charge was largely offset by less favorable
results from coinvestments and lower performance-based fees. Excluding
the foregoing items and the contribution from these segment activities,
Asset Management segment adjusted operating income decreased $25 million
from the year-ago quarter. Higher expenses, including approximately $49
million of current quarter costs for items including fund start-up
costs, reserves for costs associated with certain client contracts, and
business process improvements that we estimate are in excess of a
baseline level relative to current business volume, more than offset the
benefit of higher asset management fees reflecting growth in assets
under management.

The U.S. Individual Life and GroupInsurance division reported
adjusted operating income of $87 million for the fourth quarter of 2012,
compared to $180 million in the year-ago quarter.

The Individual Life segment reported adjusted operating income of $99
million for the current quarter, compared to $138 million in the
year-ago quarter. Current quarter results include a charge of $15
million, primarily representing transaction costs, related to the
Company’s acquisition of The Hartford’s individual life insurance
business which was completed in January 2013. Excluding this charge,
adjusted operating income decreased $24 million from the year-ago
quarter. This decrease reflected higher expenses in the current quarter,
including certain non-deferred policy acquisition costs due to higher
sales, and a benefit to year-ago quarter results of approximately $10
million from adjustments of amortization of deferred policy acquisition
and other costs as a result of separate account performance more
favorable than our assumptions.

The Group Insurance segment reported a loss, on an adjusted operating
income basis, of $12 million in the current quarter, compared to
adjusted operating income of $42 million in the year-ago quarter.
Current quarter results include a charge of $20 million to increase
legal reserves. Excluding this charge, adjusted operating income
decreased $34 million from the year-ago quarter. This decrease reflected
less favorable group life claims experience and a higher level of
expenses, including approximately $18 million of current quarter costs
for items including business process improvements that we estimate are
in excess of a baseline level relative to current business volume.

The International Insurance segment reported adjusted operating
income of $647 million for the fourth quarter of 2012, compared to $502
million in the year-ago quarter.

Adjusted operating income of the segment’s Life Planner insurance
operations was $332 million for the current quarter, compared to $300
million in the year-ago quarter. The $32 million increase in adjusted
operating income reflected continued business growth, partly offset by
higher current quarter expenses including costs associated with
technology enhancements. In addition, current quarter results reflect a
favorable impact of $13 million in comparison to the year-ago quarter
from foreign currency exchange rates including the impact of the
Company’s currency hedging programs.

The segment’s Gibraltar Life and Other operations reported adjusted
operating income of $315 million for the current quarter, compared to
$202 million in the year-ago quarter. Results for the current quarter
reflect absorption of approximately $10 million of integration costs
related to the Star and Edison businesses acquired on February 1, 2011,
while results for the year-ago quarter include $94 million of such
costs. Excluding these integration costs, adjusted operating income
increased $29 million from the year-ago quarter. This increase reflected
approximately $50 million of cost savings resulting from business
integration synergies compared to approximately $10 million in the
year-ago quarter. The benefit to results from continued business growth
was more than offset by a less favorable level of policy benefits and
higher current quarter expenses including costs associated with
technology enhancements. Current quarter results also benefited $16
million in comparison to the year-ago quarter from foreign currency
exchange rates including the impact of the Company’s currency hedging
programs.

Corporate and Other operations resulted in a loss, on an adjusted
operating income basis, of $371 million in the fourth quarter of 2012,
compared to a loss of $285 million in the year-ago quarter. Current
quarter results include a charge of $54 million to increase recorded
liabilities for certain employee benefits, reflecting the completion of
a review, and a charge of $15 million to write off bond issuance costs
on debt securities redeemed prior to maturity. Excluding these charges,
the loss from Corporate and Other operations increased $17 million from
the year-ago quarter. This increase was primarily driven by higher
interest expense, net of investment income, reflecting a greater level
of capital debt in the current quarter.

Assets under management amounted to $1.060 trillion at December
31, 2012, compared to $901 billion at December 31, 2011.

The net loss of the Financial Services Businesses attributable to
Prudential Financial, Inc. amounted to $214 million for the fourth
quarter of 2012, compared to net income of $522 million in the year-ago
quarter.

The current quarter net loss includes $1.698 billion of pre-tax net
realized investment losses and related charges and adjustments. The
forgoing net loss includes pre-tax losses of $1.527 billion representing
net changes in value relating to foreign currency exchange rates
primarily resulting from changes in value of the Japanese yen in
relation to other currencies. These currency-driven value changes were
largely offset by corresponding adjustments to accumulated other
comprehensive income which are not reflected in net income or loss. Net
realized investment losses for the current quarter also include net
losses of $134 million from products that contain embedded derivatives
and associated derivative portfolios that are part of a hedging program
related to the risks of these products as well as mark to market of
derivatives under a capital hedge program. Net realized investment
losses also reflect losses from impairments and sales of credit-impaired
investments amounting to $59 million. These losses were partly offset by
net gains from general portfolio activities.

At December 31, 2012, gross unrealized losses on general account fixed
maturity investments of the Financial Services Businesses amounted to
$2.146 billion, including $1.693 billion on high and highest quality
securities based on NAIC or equivalent ratings. Gross unrealized losses
include $390 million related to asset-backed securities collateralized
by sub-prime mortgages. Gross unrealized losses on general account fixed
maturity investments of the Financial Services Businesses at December
31, 2012 include $749 million of declines in value of 20% or more of
amortized cost. Gross unrealized losses on general account fixed
maturity investments of the Financial Services Businesses amounted to
$4.256 billion at December 31, 2011. Net unrealized gains on general
account fixed maturity investments of the Financial Services Businesses
amounted to $18.606 billion at December 31, 2012, compared to $10.493
billion at December 31, 2011.

The net loss for the current quarter reflects pre-tax increases of $108
million in recorded asset values and $94 million in recorded liabilities
representing changes in value which are expected to ultimately accrue to
contractholders. These changes primarily represent interest rate related
mark-to-market adjustments. The net loss for the current quarter also
reflects pre-tax income of $60 million from divested businesses,
primarily from reserve refinements related to long term care insurance.

Net income of the Financial Services Businesses for the year-ago quarter
included $596 million of pre-tax net realized investment losses and
related charges and adjustments, and increases of $53 million in
recorded assets and $47 million in recorded liabilities for which
changes in value are expected to ultimately accrue to contractholders,
in each case before income taxes. Net income for the year-ago quarter
also included $52 million of pre-tax income from divested businesses.

Closed Block Business

Prudential’s Class B Stock, which is not traded on any exchange,
reflects the performance of its Closed Block Business.

The Closed Block Business includes our in-force participating life
insurance and annuity policies, and assets that are being used for the
payment of benefits and policyholder dividends on these policies, as
well as other assets and equity that support these policies. We have
ceased offering these participating policies.

The Closed Block Business reported a loss from continuing operations
before income taxes of $33 million for the fourth quarter of 2012,
compared to income from continuing operations before income taxes of
$123 million for the year-ago quarter.

The Closed Block Business reported a net loss attributable to Prudential
Financial, Inc. of $18 million for the fourth quarterof 2012,
compared to net income of $82 million for the year-ago quarter.

For the year ended December 31, 2012, the Closed Block Business reported
income from continuing operations before income taxes of $64 million,
compared to $214 million for 2011. The Closed Block Business reported
net income attributable to Prudential Financial, Inc. of $41 million for
2012, compared to $146 million for 2011.

Consolidated Results

There is no legal separation of the Financial Services Businesses and
the Closed Block Business, and holders of the Common Stock and the Class
B Stock are both common stockholders of Prudential Financial, Inc.

On a consolidated basis, which includes the results of both the
Financial Services Businesses and the Closed Block Business, Prudential
Financial, Inc. reported a net loss attributable to Prudential
Financial, Inc. of $232 million for the fourth quarter of 2012 compared
to net income of $604 million for the year-ago quarter, and reported net
income attributable to Prudential Financial, Inc. of $469 million for
2012 and $3.566 billion for 2011.

Change in Accounting Principle

During the fourth quarter of 2012, with retrospective application for
earlier periods, the Company implemented a discretionary change in
accounting principle related to its pension plans. Under the revised
accounting principle, the market related value of a plan’s fixed income
assets used to calculate periodic benefit cost is now reflected annually
at fair value. The prior method calculated the market related value by
recognizing changes in the fair value of a plan’s fixed income assets in
a systematic and rational manner over five years. For the year ended
December 31, 2011, the retrospective application of the revised
accounting principle resulted in increases of $37 million and $24
million to pre-tax adjusted operating income and net income of the
Financial Services Businesses attributable to Prudential Financial, Inc.
respectively; had no impact on results of the Closed Block Business; and
resulted in an increase of $24 million to net income attributable to
Prudential Financial, Inc. on a consolidated basis. For the fourth
quarter of 2011, the retrospective application of the revised accounting
principle resulted in increases of $9 million and $6 million to pre-tax
adjusted operating income and net income of the Financial Services
Businesses attributable to Prudential Financial, Inc. respectively; had
no impact on results of the Closed Block Business; and resulted in an
increase of $6 million to net income attributable to Prudential
Financial, Inc. on a consolidated basis. As a result of the
retrospective application of the revised accounting principle,
attributed equity excluding accumulated other comprehensive income as of
December 31, 2011 for the Financial Services Businesses was increased by
$173 million, or 37 cents per Common share, and there was no impact on
attributed equity including accumulated other comprehensive income as of
that date.

Forward-Looking Statements and Non-GAAP Measures

Certain of the statements included in this release constitute
forward-looking statements within the meaning of the U. S. Private
Securities Litigation Reform Act of 1995. Words such as “expects,”
“believes,” “anticipates,” “includes,” “plans,” “assumes,” “estimates,”
“projects,” “intends,” “should,” “will,” “shall,” or variations of such
words are generally part of forward-looking statements. Forward-looking
statements are made based on management’s current expectations and
beliefs concerning future developments and their potential effects upon
Prudential Financial, Inc. and its subsidiaries. There can be no
assurance that future developments affecting Prudential Financial, Inc.
and its subsidiaries will be those anticipated by management. These
forward-looking statements are not a guarantee of future performance and
involve risks and uncertainties, and there are certain important factors
that could cause actual results to differ, possibly materially, from
expectations or estimates reflected in such forward-looking statements,
including, among others: (1) general economic, market and political
conditions, including the performance and fluctuations of fixed income,
equity, real estate and other financial markets; (2) the availability
and cost of additional debt or equity capital or external financing for
our operations; (3) interest rate fluctuations or prolonged periods of
low interest rates; (4) the degree to which we choose not to hedge
risks, or the potential ineffectiveness or insufficiency of hedging or
risk management strategies we do implement, with regard to variable
annuity or other product guarantees; (5) any inability to access our
credit facilities; (6) reestimates of our reserves for future policy
benefits and claims; (7) differences between actual experience regarding
mortality, longevity, morbidity, persistency, surrender experience,
interest rates or market returns and the assumptions we use in pricing
our products, establishing liabilities and reserves or for other
purposes; (8) changes in our assumptions related to deferred policy
acquisition costs, value of business acquired or goodwill; (9) changes
in assumptions for retirement expense; (10) changes in our financial
strength or credit ratings; (11) statutory reserve requirements
associated with term and universal life insurance policies under
Regulation XXX and Guideline AXXX; (12) investment losses, defaults and
counterparty non-performance; (13) competition in our product lines and
for personnel; (14) difficulties in marketing and distributing products
through current or future distribution channels; (15) changes in tax
law; (16) economic, political, currency and other risks relating to our
international operations; (17) fluctuations in foreign currency exchange
rates and foreign securities markets; (18) regulatory or legislative
changes, including the Dodd-Frank Wall Street Reform and Consumer
Protection Act; (19) inability to protect our intellectual property
rights or claims of infringement of the intellectual property rights of
others; (20) adverse determinations in litigation or regulatory matters
and our exposure to contingent liabilities, including in connection with
our divestiture or winding down of businesses; (21) domestic or
international military actions, natural or man-made disasters including
terrorist activities or pandemic disease, or other events resulting in
catastrophic loss of life; (22) ineffectiveness of risk management
policies and procedures in identifying, monitoring and managing risks;
(23) effects of acquisitions, divestitures and restructurings; (24)
interruption in telecommunication, information technology or other
operational systems or failure to maintain the security, confidentiality
or privacy of sensitive data on such systems; (25) changes in statutory
or U.S. GAAP accounting principles, practices or policies;
(26) Prudential Financial, Inc.’s primary reliance, as a holding
company, on dividends or distributions from its subsidiaries to meet
debt payment obligations and the ability of the subsidiaries to pay such
dividends or distributions in light of our ratings objectives and/or
applicable regulatory restrictions; and (27) risks due to the lack of
legal separation between our Financial Services Businesses and our
Closed Block Business. Prudential Financial, Inc. does not intend, and
is under no obligation, to update any particular forward-looking
statement included in this document.

Adjusted operating income is a non-GAAP measure of performance of our
Financial Services Businesses. Adjusted operating income excludes
“Realized investment gains (losses), net,” as adjusted, and related
charges and adjustments. A significant element of realized investment
gains and losses are impairments and credit-related and interest
rate-related gains and losses. Impairments and losses from sales of
credit-impaired securities, the timing of which depends largely on
market credit cycles, can vary considerably across periods. The timing
of other sales that would result in gains or losses, such as interest
rate-related gains or losses, is largely subject to our discretion and
influenced by market opportunities as well as our tax and capital
profile.

Realized investment gains (losses) within certain of our businesses for
which such gains (losses) are a principal source of earnings, and those
associated with terminating hedges of foreign currency earnings and
current period yield adjustments are included in adjusted operating
income. Adjusted operating income excludes realized investment gains and
losses from products that contain embedded derivatives, and from
associated derivative portfolios that are part of a hedging program
related to the risk of those products. Adjusted operating income also
excludes gains and losses from changes in value of certain assets and
liabilities relating to foreign currency exchange movements that have
been economically hedged or considered part of our capital funding
strategies for our international subsidiaries, as well as gains and
losses on certain investments that are classified as other trading
account assets.

Adjusted operating income also excludes investment gains and losses on
trading account assets supporting insurance liabilities and changes in
experience-rated contractholder liabilities due to asset value changes,
because these recorded changes in asset and liability values are
expected to ultimately accrue to contractholders. Trends in the
underlying profitability of our businesses can be more clearly
identified without the fluctuating effects of these transactions. In
addition, adjusted operating income excludes the results of divested
businesses, which are not relevant to our ongoing operations.
Discontinued operations, which is presented as a separate component of
net income under GAAP, is also excluded from adjusted operating income.

We believe that the presentation of adjusted operating income as we
measure it for management purposes enhances understanding of the results
of operations of the Financial Services Businesses by highlighting the
results from ongoing operations and the underlying profitability of our
businesses. However, adjusted operating income is not a substitute for
income determined in accordance with GAAP, and the adjustments made to
derive adjusted operating income are important to an understanding of
our overall results of operations. The schedules accompanying this
release provide a reconciliation of adjusted operating income for the
Financial Services Businesses to income from continuing operations in
accordance with GAAP.

The information referred to above, as well as the risks of our
businesses described in our Annual Report on Form 10-K for the year
ended December 31, 2011, should be considered by readers when reviewing
forward-looking statements contained in this release. Additional
historical information relating to our financial performance is located
on our Web site at www.investor.prudential.com.

Earnings Conference Call

Members of Prudential’s senior management will host a conference call on
Thursday, February 7, 2013 at 11 a.m. ET, to discuss with the investment
community the Company’s fourth quarter results. The conference call will
be broadcast live over the Company’s Investor Relations Web site at www.investor.prudential.com.
Please log on fifteen minutes early in the event necessary software
needs to be downloaded. The call will remain on the Investor Relations
Web site for replay through February 22. Institutional investors,
analysts, and other members of the professional financial community are
invited to listen to the call and participate in Q&A by dialing (877)
777-1971 (domestic callers) or (612) 332-0226 (international callers).
All others are encouraged to dial into the conference call in
listen-only mode, using the same numbers. To listen to a replay of the
conference call starting at 2:00 p.m. on February 7, through February
14, dial (800) 475-6701 (domestic callers) or (320) 365-3844
(international callers). The access code for the replay is 272217.

Prudential Financial, Inc. (NYSE: PRU), a financial services leader with
approximately $1.060 trillion of assets under management as of December
31, 2012, has operations in the United States, Asia, Europe, and Latin
America. Prudential’s diverse and talented employees are committed to
helping individual and institutional customers grow and protect their
wealth through a variety of products and services, including life
insurance, annuities, retirement-related services, mutual funds and
investment management. In the U.S., Prudential’s iconic Rock symbol has
stood for strength, stability, expertise and innovation for more than a
century. For more information, please visit www.news.prudential.com.

Assets and Asset Management Information (in billions, as of end
of period)

Total assets

$

709.3

$

620.2

Assets under management (at fair market value):

Managed by U.S. Retirement Solutions and Investment Management
Division:

Asset Management Segment - Investment Management and

Advisory Services

$

827.0

$

717.8

Non-proprietary assets under management

196.8

152.2

Total managed by U.S. Retirement Solutions and Investment Management
Division

1,023.8

870.0

Managed by U.S. Individual Life and Group Insurance Division

16.4

13.8

Managed by International Insurance Division

20.1

16.9

Total assets under management

1,060.3

900.7

Client assets under administration

91.9

85.7

Total assets under management and administration

$

1,152.2

$

986.4

See footnotes on last page.

(1)

Adjusted operating income is a non-GAAP measure of performance of
our Financial Services Businesses that excludes "Realized investment
gains (losses), net", as adjusted, and related charges and
adjustments; net investment gains and losses on trading account
assets supporting insurance liabilities; change in experience-rated
contractholder liabilities due to asset value changes; results of
divested businesses and discontinued operations; earnings
attributable to noncontrolling interests; and the related tax
effects thereof. Adjusted operating income includes equity in
earnings of operating joint ventures and the related tax effects
thereof. Revenues and benefits and expenses shown as components of
adjusted operating income, are presented on the same basis as
pre-tax adjusted operating income and are adjusted for the items
above as well.

Realized investment gains (losses) within certain of our businesses
for which such gains (losses) are a principal source of earnings,
and those associated with terminating hedges of foreign currency
earnings and current period yield adjustments are included in
adjusted operating income. Adjusted operating income excludes
realized investment gains and losses from products that contain
embedded derivatives, and from associated derivative portfolios that
are part of a hedging program related to the risk of those products.
Adjusted operating income also excludes gains and losses from
changes in value of certain assets and liabilities relating to
foreign currency exchange movements that have been economically
hedged or considered part of our capital funding strategies for our
international subsidiaries, as well as gains and losses on certain
investments that are classified as other trading account assets.

Adjusted operating income does not equate to "Income from continuing
operations" as determined in accordance with GAAP but is the measure
of profit or loss we use to evaluate segment performance. Adjusted
operating income is not a substitute for income determined in
accordance with GAAP, and our definition of adjusted operating
income may differ from that used by other companies. The items above
are important to an understanding of our overall results of
operations. However, we believe that the presentation of adjusted
operating income as we measure it for management purposes enhances
the understanding of our results of operations by highlighting the
results from ongoing operations and the underlying profitability
factors of our businesses.

(2)

Net income for the Financial Services Businesses and the Closed
Block Business is determined in accordance with GAAP and includes
general and administrative expenses charged to each of the
businesses based on the Company's methodology for allocation of such
expenses. Cash flows between the Financial Services Businesses and
the Closed Block Business related to administrative expenses are
determined by a policy servicing fee arrangement that is based upon
insurance and policies in force and statutory cash premiums. To the
extent reported administrative expenses vary from these cash flow
amounts, the differences are recorded, on an after-tax basis, as
direct equity adjustments to the equity balances of each business.
The direct equity adjustments modify earnings available to holders
of Common Stock and Class B Stock for earnings per share purposes.
Earnings per share of Common Stock based on adjusted operating
income of the Financial Services Businesses reflects these
adjustments as well.

(3)

Diluted share count used in the diluted earnings per share
calculation for GAAP measures is equal to weighted average basic
common shares for the three months ended December 31, 2012 as all
potential common shares are anti-dilutive due to the loss from
continuing operations available to holders of common stock after
direct equity adjustment.

(4)

In calculating diluted earnings per share under the if-converted
method, the potential shares that would be issued related to the
exchangeable surplus notes assuming a hypothetical exchange,
weighted for the period the notes are outstanding, is added to the
denominator, and interest expense, net of tax, is added to the
numerator, if the overall effect is dilutive. For the year ended
December 31, 2012, the hypothetical impact of these shares was
antidilutive and therefore excluded from the diluted earnings per
share calculation for GAAP measures. The weighted average number of
outstanding common shares used in the diluted earnings per share
calculation for the year ended December 31, 2012 for GAAP measures
is 468.1 million.

(5)

Premiums from new sales that are expected to be collected over a one
year period. Group insurance annualized new business premiums
exclude new premiums resulting from rate changes on existing
policies, from additional coverage issued under our Servicemembers'
Group Life Insurance contract, and from excess premiums on group
universal life insurance that build cash value but do not purchase
face amounts. Group insurance annualized new business premiums
include premiums from the takeover of claim liabilities. Excess
(unscheduled) and single premium business for the company's domestic
individual life and international insurance operations are included
in annualized new business premiums based on a 10% credit.

(6)

Actual amounts reflect the impact of currency fluctuations. Foreign
denominated activity translated to U.S. dollars at uniform exchange
rates for all periods presented, including Japanese yen 80 per U.S.
dollar; Korean won 1160 per U.S. dollar. U.S. denominated activity
is included based on the amounts as transacted in U.S. dollars.